Christopher Griffiths
Anonymous Libel as a Business Plan? 01/12/2011
Wow, so yesterday a story got picked up in the blogosphere (what an atrocious word) about a company that I've owned and traded off and on for the past few years - it's a small Chinese IT/tech company called Telestone (NASDAQ:TSTC). They make and service internet & telephony systems in China, and from their publications and filings, it seems they're a pretty strong, growing company.
An anonymous, heretofore unknown blogger on seekingalpha.com, calling himself "theForensicFactor" posted a couple of pages of nefarious, ill-explained commentary alleging that Telestone is a fraudulent front. It was anonymously reposted on ZeroHedge.com by the self-styled "Tyler Durden," of fight club fame (also an anonymous blogger, though one with over 300,000 readers) - see http://en.wikipedia.org/wiki/Zero_Hedge for some info about ZeroHedge, whose modus operandum seems to be effecting, "a purifying market crash that leads to the elimination of the big banks altogether."
The result of these anonymous postings was, over the course of a couple of hours, a 28% drop in the price of Telestone - wiping some $40MM or so off the market cap of the company. TSTC is perhaps an exceptionally volatile stock and especially susceptible to this kind of hit job, but it strikes me as amazing: by simply begging the question of Telestone's iniquity, an unkown and anonymous blogger was able to generate a huge hit to the company's valuation.
Assuming they played that swing right, TheForensicFactor and Tyler Durden, whoever they may be, should never have to work again. I am in awe.
An anonymous, heretofore unknown blogger on seekingalpha.com, calling himself "theForensicFactor" posted a couple of pages of nefarious, ill-explained commentary alleging that Telestone is a fraudulent front. It was anonymously reposted on ZeroHedge.com by the self-styled "Tyler Durden," of fight club fame (also an anonymous blogger, though one with over 300,000 readers) - see http://en.wikipedia.org/wiki/Zero_Hedge for some info about ZeroHedge, whose modus operandum seems to be effecting, "a purifying market crash that leads to the elimination of the big banks altogether."
The result of these anonymous postings was, over the course of a couple of hours, a 28% drop in the price of Telestone - wiping some $40MM or so off the market cap of the company. TSTC is perhaps an exceptionally volatile stock and especially susceptible to this kind of hit job, but it strikes me as amazing: by simply begging the question of Telestone's iniquity, an unkown and anonymous blogger was able to generate a huge hit to the company's valuation.
Assuming they played that swing right, TheForensicFactor and Tyler Durden, whoever they may be, should never have to work again. I am in awe.
